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Tax breaks intended to fuel growth

Some local officials believe payment in lieu of tax agreements are big for bringing development to Loudon County.

“Essentially you have to think of it like a coupon,” Jack Qualls, Loudon County Economic Development Agency executive director, said. “Instead of you paying the full amount of taxes that would be normally owed, you pay a discounted rate for a set number of terms and then it goes back on the tax roll at that valued rate that it’s at at the current time in the PILOT. PILOTs are used to incentivize growth, whether it be growth in jobs, whether it is for residential or for manufacturing or for commercial. It’s used as a tool in the toolbox to recruit growth.

“... As an investor you’re trying to recoup your money, right? You’re looking at trying to get return on your investment,” he added. “Why would you go build somewhere that has a high tax rate or a low tax rate? What is the incentive for you to go put your investment in a certain location?”

Lenoir City officials hope to lean into growth and encourage developers to come.

The city in 2018 approved a 10-year PILOT for about $50,000 per year to allow LHP to remodel and renovate Springplace Apartments.

Last year there were four PILOTs — three residential and one commercial. The three residential were outside of the central business district, which in September required the city create a Health, Educational and Housing Facility Board to meet state law, Tony Aikens, Lenoir City mayor, said.

The city in December gave the go-ahead for the standalone commercial PILOT “Project Gator” off McGhee Boulevard for three years at $19,381 per year. The three residential-use PILOTs are Universal at Town Creek for five years at $139,098 per year, West Point Place for 20 years at $182,745 per year and Cityview for 10 years at $61,010 per year.

Amber Scott, Lenoir City administrator, said the residential PILOTs were approved by the housing facility board, but no other action has been taken.

The developer for West Pointe Place could break ground in March, Aikens said.

Aikens said an agreement is in place with the Cityview developer to acquire the property, but the land has not transferred. Aikens owns the property, which he informed Lenoir City Council prior to the September vote. He said he has no involvement in the development.

“When you look at the growth of our community right now, most of the growth that’s happening is $300,000-plus homes in the Village,” Qualls said. “That is a retirement community. Those are not your workforce. When you look at your workforce, you’re at average medium age of our workforce is 48. What happens in 10 years is they’re 58, they’re getting closer to retirement. What we’re trying to do is incentivize growth to come here and people to bring their families, people that want to be part of our workforce. If they have housing, they’ll come here. If they don’t have housing, they can’t afford to come here.”

Qualls pointed to a 2020 migration trends report from U-Haul ranking every state, with Tennessee ranking No. 1 for one-way trips. East and Central Tennessee had the largest gains for U-Haul arrivals.

Aikens said the city should continue to be aggressive to get residential and commercial developers.

“We have to do creative things sometimes to make that happen,” he said. “Will it always be that way? No, not if Lenoir City keeps growing. But for right now we have to think of creative ways to get those developers to come in here and build those type houses and those type homes for people to move into Lenoir City. I personally want Lenoir City to grow. If Lenoir City doesn’t grow, we’re not going to have more restaurants, we’re not going to have movie theaters, we’re not going to have big box stores until Lenoir City gets more rooftops. It drives every bit of it, and we’ve been told time and time again from the community leaders and from the businesses and people that’s doing these studies, ‘You need more rooftops. You’re never going to get those things until you get more rooftops’.”

According to a 2020 Loudon audit, there are four agreements active, including Tate & Lyle at $90,000 per year through 2026, Del Conca USA Inc,. at $168,574 per year through 2023, Poindexter Properties LLC at $56,399 per year and Wells Fargo Equipment Finance Inc., at $66,433 per year, both through 2026. Another agreement for Vanhoosco Precast LLC expired Dec. 31.

Loudon Mayor Jeff Harris said the city has not entertained a new PILOT in years, but he believes incentives are important to bring development.

“I mean it’s just a necessary evil, it’s just something you’ve got to do,” Harris said. “If you’re going to be competitive you’re going to have to offer incentives and PILOTs are a big incentive. Hopefully you make it back up after the PILOT expires or whatever, make it back up with new businesses. A lot of times it’s something that’s not been on the tax roll so after the PILOT’s over you’ve added something to the tax roll. It’s just the nature of the business now and that’s just where we are competing with other counties and other regions. You just got to get creative with it. Sometimes it’s tax abatements and it could be land, so there’s other different options and you’ve just go to get creative with it. I think our EDA does a pretty good job offering those PILOTs and incentives to attract businesses.”

Harris said offering incentives is imperative before another community does.

“You may think you have the most attractive PILOT and then someone comes up with something different so you might have to change your strategy as you go,” he said. “It’s something that has developed over time and that’s just where we are and if we’re going to recruit some of those businesses we’re going to have to be willing to do PILOTs. I think if you don’t offer them, it shuts a lot of doors. I just think that that’s where we are today and we just got to continue offering them.”

Ty Ross, Loudon city manager, agreed.

“Capital investment is discretionary,” Ross said. “No person or company is required to build anything anywhere. Therefore, one that strongly desires new capital investment tries to encourage and attract investors. Capital goes where it is welcome and PILOTs are one way of welcoming investment.”

LCHS students help in COVID fight
  • Updated

Lenoir City High School has COVID-19 dividers at all tables in the commons and cafeteria thanks to Steven Code’s engineering students.

Each semester Code tasks students with a major project to help the school or community.

Students in three classes worked together at the beginning of the school year to create virus protection dividers. By the end of October, all 60 dividers were in place, Code said.

“Obviously, early in the fall we kind of flip-flopped because we needed something like this right away,” he said. “We pretty much came up with the idea of, ‘OK, we’ve got a got a problem,’ and so then this was our solution to the problem. That class, the third-year class, is the one that pretty much started the design process. They did a preliminary order of all the tables in the cafeteria and the commons. Pretty big job. The first thing we had to do was come up with a better design for round tables because the square design did not work. Then we brainstormed and came up with this design.”

After getting the OK from administration, students went to work on a better prototype and crafted dividers using PVC pipe and painter’s plastic for circular tables.

“The dividers were an interesting process,” Alexander DeRose, LCHS student, said. “I was working as a peer tutor for the class that made the majority of them, so I was kind of heading up the project. On certain days we would do different parts, so on Monday we would build the frames and on Tuesday we would cut the plastic, etc. We formed a sort of assembly line to get them finished. The work was fun, and it was a good learning experience for everyone in the class, and the dividers ended up being useful, however annoying.”

“I learned how to work and be part of an efficient assembly line, while working with others,” Tristan Hirzel, LCHS student, added. “I felt that the best part of the project was putting together all of the dividers with my classmates after cutting the tubing to the right lengths. I feel good knowing I did something to help people stay healthy during the pandemic. I would have to say that the class as a whole learned how to work with each other efficiently.”

Contact tracing was an issue during student lunch periods, Chip Orr, LCHS principal, said. Educators contacted Loudon County Health Department to see if the dividers could help.

“Now the kids can sit where they want to, they’re not locked into a particular table, so it created some freedom for the kids,” Orr said. “Now they would prefer not to have barriers on their table even though they can see through them and they can still talk, but it’s better than what we were at from their perspective and ours.”

Alexander Barton, LCHS student, hopes the dividers will keep COVID-positive numbers down and get people back in school.

Code pointed to students getting more out of the project than just building dividers.

“The critical thinking is the biggest thing,” he said. “The design was part of it, but then what I enjoyed was the discussions and they didn’t come to me and say, ‘Can we do this to make it better?’ They just started it. A lot of just trial and error, what can be (done), test it to see if it can be better on the manufacturing.”

He thanked students in the residential and commercial construction class for providing wooden bases for the dividers and working through requests for changes.

“We look for kind of school-based enterprises and things that our kids that the stuff they’re looking in class they can apply in a real-world application and this was a perfect opportunity,” Mark Weeks, LCHS assistant principal and CTE director, said. “Mr. Code stepped up and said, ‘Hey, why don’t we do this?’ Yeah, I’m very proud of their efforts and just how sharp they are to come up with these designs. Our kids are just really good at what they’re learning and applying what they’re learning. This is kind of the epitome of what is supposed to be produced out of CTE classes. This is perfect.”

Plans are to keep the dividers up through the remainder of the pandemic, Orr said.

Code can’t help but feel proud of students for doing something that makes a difference.

“And they’re proud of it,” he said. “What I look at is when they come through and they see something has come loose and they’ll fix it on their own because they want it to be (nice) because it’s their project. It was interesting, too, because obviously a lot of the kids did not like the idea because it was different. I would overhear them talking, ‘Well, we need to do it for this,’ so they were talking up the project to the other kids.”

Chamber stokes momentum

Loudon County Chamber of Commerce leadership is optimistic 2021 will build off the successes of the past couple of years.

“Coming off last year and doing as well as we did in that environment, I think we have a lot of good things in store for us for 2021,” Rodney Grugin, chamber president, said. “Our membership seems to be excited. Our board is excited and so I think we’re moving forward, that the momentum is there. … We’ve got a great board this year, got some new people on it with the energy levels, so we’re excited for ‘21.”

The focus for board chairman George Bove will be to invite, speak well and unite.

“Invite every single person business-minded, community-minded. Invite,” Bove said. “They’re all invited … to come to our events, check it out and become a member. Then for our membership, more especially our leadership, speak well. Speak well is hugely important. The more that we speak well the more that people are going to know about us. It’s not a great secret and people ought to know about us. I’ve encouraged our board, our board of directors, our executive board all to speak well as much as they can about the chamber.

“… We can see, you can see, business coming up in Loudon County. It’s beautiful,” he added. “There’s new businesses opening every day and we can see these folks who are moving here from these other states. They’re bringing their entrepreneurial skills with them.”

With a membership of 439, the chamber’s goal of 500 is closer to reality.

Meeting that goal falls on creating excitement.

“Introducing different type programs, things that will be more attractive to a larger audience, if you will,” Grugin said. “Last year we started the member education program. That went really well in the fourth quarter of last year and we’re going to continue that this year. That’s a program where we could scholarship train for our members. Adding programs such as that is going to entice members to come and join.”

Grugin hopes to keep prior events and programs in place, including DIY workshops and the business expo.

The expo was held Feb. 28 at The Venue at Lenoir City. If the event happens this year, Grugin said it could return to The Venue or be held at an outside location.

“We have our golf tournament coming up the first of April,” Grugin said. “Toqua Golf Course out in Tellico Village is going to host us for that, so we’re really excited about that. We’re going to attempt to do our business expo, which normally that’s done end of February or first of March, and we haven’t started planning that yet because we don’t know what that’s going to look like this year. We’ll also have our gala. … Again, we don’t know exactly how that’s going to look, what happens with COVID. We’re going to try to play it by ear and as we go through we’re going to add as many things as we can.”

Other activities are being considered, Grugin said.

“We haven’t really settled on a lot of things,” he said. “We’ve added a couple of events and more fun-type of events than really your basic fundraiser. We want to increase the visibility of the chamber and what we’re doing and we want to have some fun while we do that.”

Depot Street will be blocked off noon-5 p.m. March 19 for a Chop to the Top axe-throwing competition at East Tennessee Axe Throwing in Lenoir City. The competition will be in conjunction with the Historic Downtown Lenoir City Merchants Association.

“We started this year, we have our events, we have our golf tournament, which is beautiful, we have our Business After Hours, our gala event and things of that nature that have great networking opportunities, but me and a few others thought, ‘Well, let’s see if we can add a couple more events’,” Bove said. “The axe-throwing place in Lenoir City was a beautiful opportunity to bring folks who don’t play golf. … That’s going to be an exciting event.”

He said the chamber is also planning a cornhole tournament later in the year.

“To me joining the chamber is just like joining anything else, just like joining a gym,” Grugin said. “If you join a gym and don’t ever go, you’re not going to have any progress. If you join the chamber and you don’t participate, then you’re not going to get anything out of it. Give it a chance. Come talk to us. We can let you know what we’ve got going.”

Updates to the chamber website are nearly complete.

“We’re real excited about that to be able to do some things that we haven’t been able to do in the past with that,” Grugin said. “We’ve also instituted a new member management software, which is going to, again, allow us to do some things that we haven’t been able to do in the past. We made that investment last year and still trying to pull that online. It’s been a long process, but it’s going to be well worth it when we get it done.”

For more information, visit www.loudoncountychamberofcommerce.com.

Santek accused of contract breach

Loudon County Solid Waste Commission has accused Matlock Bend Landfill operator Santek Waste Services of breach of contract after learning dormant landfill cells are not being closed.

The Tennessee Department of Environment and Conservation is requiring all operators in the state, including Santek, submit a phased closure plan by June 30. Solid waste board members in January passed a motion authorizing board attorney Kevin Stevens to write a letter to Santek demanding specific actions be taken during the process.

Demands included the board’s written approval of the plan within 90 days of submission to TDEC, a phased closure plan with definitive deadlines for closure of specific cells and a deadline for closure of dormant cells, Stevens said.

Santek has been accused of not filling cells to completion to avoid closure costs. There are currently 13 cells open in the landfill. Many of the cells have been dormant for years.

Stevens received a response from Santek’s lawyer.

“Frankly, it says very little and doesn’t respond to what we had asked specifically,” Stevens said. “… The long and short of it is they did say they would submit a closure plan, and they did say that they will provide it to us for review and comment in advance of approval. It didn’t state that we would approve it in writing, and it didn’t state when they would provide it to us for review and comment.

“In the second to last paragraph, they deny that they are in violation of any solid waste laws or TDEC regulations or that they have failed to comply with their requirements under our contract,” he added. “… The letter really doesn’t address our specific concerns other than tell us they’ll keep us in the loop with regard to their submissions to TDEC, but it doesn’t outline exactly what they’re going to do relative to the plan or our written approval of the plan or specifically what they’re going to include in the plan relative to requiring phased closure with a definitive timeline.”

Stevens said he was “underwhelmed” with the response.

TDEC has started to tighten landfill regulations, which have historically been lax compared to neighboring states.

The current contract requires Santek to close cells as they reach final elevation.

“The wiggle room that Santek has realized is that it will fill the landfill 2 or 3 feet below final elevation,” Steve Field, board chairman, said.

Ben Johnston, Santek representative, said Field was incorrect. The current height of the landfill is 1,070 feet, but the permit allows 1,108 feet.

“That’s the highest point,” Field said. “The point is there are some areas of the landfill that don’t go to that full elevation that are near final grade that had been at or near final grade for years, and you folks purposely don’t build it to final grade because if it hit final grade you’d have to close it.”

Stevens said the board was previously in negotiations with Santek about a contract amendment with language regarding phased closure and the concept of closing one cell before opening a new one. Those discussions halted when the board in November voted to pause contract negotiations until further notice.

Johnston said the board can expect a plan in six to eight weeks.

“I am saddened by the tone of this letter,” Larry Jameson, solid waste board member, said. “I would have thought the relationship with Santek and this commission warranted a better response.”